Cryptocurrency Ransom Demanded for Wife of Norwegian Tycoon

OSLO — The wife of a wealthy Norwegian businessman has been kidnapped, and demands have been made for a hefty ransom paid in cryptocurrency, the police revealed this week, as a drama that had been playing out secretly for months burst into public view.

Anne-Elisabeth Falkevik Hagen went missing on Oct. 31 from her home near Oslo, and international police investigations and back-channel negotiations with the people believed to be her captors have so far failed to secure her release.

At news conferences on Wednesday and Thursday, the police said they had established a line of communication with people claiming to be holding Ms. Hagen, but would not elaborate. They conceded that they did not know who the captors were, or even whether Ms. Hagen, 68, was still alive.

“There are no known signs of life,” Tommy Broske, head of the police unit investigating the disappearance, said on Thursday.

The case has riveted the country and dominated headlines. The authorities have not revealed the size of the ransom demand, but it has been widely reported as 9 million euros, about $10.3 million. Mr. Broske said the police had advised Ms. Hagen’s husband, Tom Hagen, not to pay.

On Thursday, officials revealed that several Norwegian news organizations knew of the kidnapping more than a month ago, but held off reporting on it at the request of the police.

The police also released surveillance video of three men outside Mr. Hagen’s office, saying they wanted to interview the men. The police said they had received more than 100 tips since going public with the case.

Mr. Hagen, also 68, is the founder and owner of Elkraft, an electricity company, and his real estate holdings include a large stake in a popular ski resort. Though he is often described as media-shy, he was featured in a string of news reports over the summer that underscored his wealth, estimated by a Norwegian business magazine at 1.7 billion kroner, or about $200 million.

Ostentatious shows of wealth are rare in Norway, and people there are generally proud of the country’s egalitarian spirit. But the abduction of Ms. Hagen has prompted a debate over an element of that culture: the legal requirement that every person’s tax return be made public, which some people fear could turn the rich into targets.

The case has also highlighted the use of cryptocurrencies in illegal activities, leading to calls to regulate or even ban them, and for more law enforcement resources to investigate their use.

Governments are “lagging behind” in coming to terms with cryptocurrency, said Carsten Schurmann, an associate professor at the IT University of Copenhagen.

Image

Ms. Hagen has not been seen since Oct. 31.CreditNorway Police, via Associated Press

“Cryptocurrencies are not organized by a state or another entity, that’s why it is difficult to regulate them,” he said.

The Hagens have a modest home in Lorenskog, a quiet, middle-class town near Oslo — the same house where they lived before Mr. Hagen made his fortune.

The police say they believe Mrs. Hagen was taken from their home on the morning of Oct. 31.

Norwegian news outlets, citing anonymous law enforcement sources, have reported that there was no evidence of a break-in at the house, but there were signs of a struggle in a bathroom.

A scarcely decipherable ransom note was left for Mr. Hagen, containing death threats and requests for large quantities of Monero, an unregulated cryptocurrency that is known for anonymous transactions.

“It is more difficult to follow the money with Monero,” said Torbjorn Bull Jenssen, an investor and chief executive of Arcane Crypto, a firm that works with cryptocurrencies. “It has gained some attention among criminals, although its safety might be false: Academic papers have already shown its anonymity has cracks and flaws.”

The reported size of the ransom demand is unrealistic, he added, because the Monero market is relatively small.

“It would represent 1 percent of all existing Monero,” Mr. Jenssen said. “The ransomers, if they got the sum, would have a hard time finding buyers.”

The Norwegian police said they had sought help from international law enforcement groups, but that did not necessarily mean there were links to other countries.

“We have not had similar cases in Norway, so it is quite natural to seek information internationally,” Mr. Broske said.

The first widely reported kidnapping for cryptocurrency occurred in January 2015, when Ryan Piercy, a Canadian living in Costa Rica, was abducted and his captors demanded $500,000 worth of Bitcoin. He was released a month later.

Svein Holden, a legal representative for the Hagen family, called the kidnapping a “cruel and inhumane act.” He said the family would follow the advice of the police, and that they wanted “to get in touch with those who have Anne-Elisabeth today.”

“They want to get a confirmation that she is O.K. and that she is alive,” he said. If she is, he added, “the family is prepared to initiate a process.”